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How to use MaxDiff analysis

MaxDiff analysis can be your go-to tool for market research. Get more out of your data with expertise from global market research services.

If your business is successful, there are bound to be plenty of things about your products and services that your customers like.

Yet there are times when it’s important that you know what those customers value the most—even love—above all else that makes them loyal and repeat customers who readily sing the praises of your brand.

That’s where MaxDiff analysis can be your go-to tool for market research. The methodology provides useful data about your customer preferences so you can make sure you are meeting their needs and exceeding their expectations through ever-improving products and services.

What is MaxDiff analysis?

MaxDiff analysis is an analytic methodology used to gauge survey respondents' preference score for different items that results in a best-worst ranking of those attributes.

With MaxDiff analysis, you can identify customer preferences based on lists of attributes or features for just about any product, service, or issue. So, if your company makes exercise equipment, you could conduct a MaxDiff survey asking respondents to choose what they like best about your treadmills such as quietness, online coaching, health metric electronics, or portability. The same type of approach could be used by a hotel chain seeking to learn what’s most important to customers during a stay, or a clothing retailer wanting to identify what customers appreciate most during an in-store shopping experience.

Gaining this insight through a survey using MaxDiff design can be the key to making better, more informed decisions and investments that can help drive growth—and prevent you from costly missteps based on assumptions that aren’t backed by data.

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How MaxDiff analysis works

MaxDiff analysis works by forcing people to choose the most and least important attributes from a list they are provided in a survey. By respondents being forced to choose based on a MaxDiff survey question, they can do some heavy lifting for you by identifying what’s likely most important to most customers.

In this way, a MaxDiff design goes beyond standard rating questions that only ask people to provide feedback about the degree to which they like or dislike a product, service or specific feature, or questions that simply ask respondents to identify what they like without forcing them to identify which they value the most.

A potential challenge with those types of surveys is that people typically like many features of a product or service. But without insight on what they like the most, it’s difficult to make decisions and tradeoffs on what to invest in or improve.

MaxDiff Example

Let’s use the hotel example again. There are likely a whole slew of amenities that your guests appreciate. They may like the convenient location, free breakfast, unlimited wi-fi, valet service, comfortable beds, and the full-scale gym with an indoor pool.

As a hotel operator, the fact that there are many features that customers like is great. After all, it only helps to enhance your overall customer experience, which leads to great reviews, return guests, and positive word-of-mouth buzz.

But say that business is so brisk that you now want to open another similar hotel in another section of the same city. Your budget and resources aren’t unlimited, and you want to make sure that you get the maximum value out of the new location by attracting the most traffic from your target audience. This is an instance in which MaxDiff analysis can work its magic.

After you determine the group or groups you plan to get feedback from, you can then create a MaxDiff survey that will give you greater insight into the amenities and services that members of that group value most.

From this survey you should get some instructive insights that can help guide your decision-making about the new hotel. For instance, you may find that the location with easy access to downtown is by far the most favored feature among the group you are surveying. Based on that insight, it may make sense to pay more for a location on some prime real estate that will allow guests to readily access the downtown district.

Yet, if “free” is what triggers the most positive response from your guests, then it’s worth considering investing less in location and other nice-to-have amenities so you can focus on offering free breakfast, wi-fi, and parking.

By forcing your respondents to choose, they have helped make choosing your own priorities that much easier.

Prioritizing features through MaxDiff analysis

You can also put a MaxDiff survey to work to help you figure out what features to prioritize in a product or service.  

For instance, when it comes to product development, MaxDiff can be a great tool in the process of developing an entirely new product, or creating an upgraded or “new and improved” version of an existing product for which sales may have flatlined recently. For example, maybe you’re a bakery that offers bagels, pastries, and other baked items. A recent trend of low-carb diets has you thinking that your customers are prioritizing healthier choices.

That’s the logical conclusion—but is it the right one? MaxDiff analysis can help you find out. So you could ask customers to rank the features they like best about your products, listing options such as:

  • Variety of offerings
  • Locally sourced ingredients
  • Great taste
  • Healthy low-carb options
  • Sweet and decadent treats

If your initial hypothesis is correct then it would make sense to explore how to expand your low-carb and healthy options to better satisfy existing customers and hopefully attract new ones.

But say that your results come back and they end up in the following order, from most liked to least:

  • Great taste
  • Sweet and decadent treats
  • Variety of offerings
  • Locally sourced ingredients
  • Healthy low-carb options

These results offer up an entirely new, and unexpected, insight. Based on the responses, it appears likely that the majority of your customers aren’t hyper-focused on healthy choices when they shop with you. Instead, perhaps they see your products as their go-to choice when they are simply looking for some great tasting baked goods, or even as a sweet reward for making healthy choices in other aspects of their lives.

In this example, if it weren’t for MaxDiff analysis you may have gone all-in on revamping your menu so it features a broader range of health-conscious and low carb products. That would have been a costly mistake if it ends up turning off your best customers, who may decide to take their business to Krispy Kreme.

Testing ad claims with MaxDiff analysis

Let’s assume you have a new product with a long list of great features.

That’s great, but it also raises the question: Which features should be emphasized in your product offering? 

In other words, you’re looking to showcase the most compelling aspects of your product in your advertising and marketing that will resonate most effectively with your target audience of prospects and customers.

Advertising demands focus—you only have an instant to catch interest and deliver your most compelling message. Consider an unscientific experiment by marketing expert Ron Marshall, who set out to see how many ads he was exposed to during a typical day. Marshall bailed on the experiment almost before he started when he counted 487 ad messages before he even had finished breakfast.

So yes, knowing which ad claims will resonate most effectively with your target audience is essential. And a great way to find that out is via a MaxDiff analysis. You can craft different messages highlighting various features of a certain product you are advertising, and then survey customers to see which ones resonate best with them. So if you aim to pitch a new cleaning product, some messaging choices might be:

  • Cleans your mess for less
  • Makes your house smell like spring all year round
  • Kills 99.9% of household germs
  • Safe for you and your feline friends

Advertising dollars are typically tight, and the feedback that you get from a survey question such as this can help you nail down the most effective message. Also the next-best supporting messages for longer ads or marketing content.

What is needs-based segmentation?

Segmentation is nothing new in marketing. It’s all about sorting through your customers and grouping them in logical ways to better target them while meeting their product needs. Common ways to segment might be age groups, gender, geographic location or by products customers tend to purchase.

This segmentation is useful, but it doesn’t typically get to the core of what motivates your customers actions and decisions. Needs-based market segmentation fills that gap by segmenting your customers based on their underlying attitudes and behaviors. MaxDiff analysis can help identify the traits and priority needs driven by these attitudes and behaviors so you can then tailor your efforts and messaging to meet those needs.

For instance, a needs-based MaxDiff survey for a new kitchen blender might ask if the main motivation for those being surveyed is either:

  1. Maximum convenience
  2. Value for your money
  3. Optimal performance

In this instance, if the most important need by the majority of respondents is focused on convenience, then your efforts will likely be best spent emphasizing the ease and speed of the product—and future product enhancements can be focused on amplifying that convenience.

The key benefits of MaxDiff analysis

Clearly MaxDiff analysis can make a huge difference by getting to the heart of your customers top preferences, and then providing actionable data to help guide your focus and decisions. These key benefits include:

  • Clear insight
    You get greater clarity on what aspects of your products and services are most important to your customers, as well as insight into what else they value in descending order to the least valued on the list. This can help affirm that you should stay the course with your product development or messaging -- or that you need to rethink how you are promoting your products or services.
  • Greater efficiency
    If you’re doing things right, when you ask your customers what they like about your products they could go on and on. That’s all well and good, but it doesn’t provide much insight to help you keep improving and growing. By MaxDiff surveys forcing respondents to choose, you get right to the core of the issue so you can use your results to execute on data-driven actions.
  • Straightforward recommendations
    Often the feedback you capture via MaxDiff analysis is pretty black and white when it comes to resulting data. If the majority of those surveyed state that they shop your bakery for a decadent treat then you can feel pretty confident in recommending that it makes sense to put emphasis on that in your marketing—and maybe order more sugar from suppliers.
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Drawbacks of MaxDiff

There are potentially a few challenges with MaxDiff analysis as well. Among them:

  • Knowing what your customers hate
    MaxDiff does a great job of identifying what your customers like the most. But, depending on how your survey is set up, it often can’t reveal the stuff they might not like at all—or even despise. This challenge lies in the fact that MaxDiff analysis typically reveals what your customers like best in descending order, but whatever comes in last place doesn’t fully reveal what customers think about it.

    So if you were asking customers what they like most about cherry, chocolate-chip ice cream cones you might give them four choices, such as: the chocolate chips, cherries, the creamy ice cream and the crunchy cone.

    In this instance, the crunchy cone may end up listed as the least favorite of the options. But odds are that plenty of your customers like that crunchy cone —just less than the other delicious stuff listed. Or they might hate the crunchy cone. With MaxDiff it’s hard to know.
  • Knowing how much customers may love a certain product or feature
    Similar to not knowing what your customers might hate, with MaxDiff analysis it’s also difficult to get a clear read on a product or feature that is prompting your customers to be happy on a daily basis.

    For instance, say you were asking them to rank candies from most favorite to least favorite. Your results may show strawberry candy at the top, but what it doesn’t reveal is that many of those customers have a nearly irrational love for strawberry that prompts them to consume copious amounts daily, hang strawberry candy art on their walls, and plan to have bowls of this type of candy at their birthday parties. This type of unbridled passion for a product can be a gold mine for a candy marketer, but a MaxDiff analysis will only tell you that more people like them better than other candies.
  • Too close to call
    MaxDiff works best when there is a clear winner, and it never hurts to have a clear runner up as well. When that occurs, it makes recommendations and related actions  pretty clear. Yet, things can get a bit more challenging when you have a tight race for the top. So going back to the bakery example, imagine if you surveyed 100 people and it turns out that at the top of the most-liked list is a decadent sweet treat with 39 respondents choosing it. Yet, close behind with 38 respondents ranking “more healthy choices” at the top of the list.

    No doubt, this insight would be helpful—you know that you have customers on the opposite ends of the spectrum when it comes to why they shop with you. But figuring out how to keep everyone happy may take some more investigation.

How does MaxDiff analysis differ from other methods

MaxDiff is one of several market research methodologies aimed at identifying and ranking customer preferences to produce best-worst data. Here is a breakdown on how MaxDiff analysis differs from other common methods: 

  • MaxDiff analysis vs. Best-Worst Scaling
    In market research, MaxDiff analysis and best-worst scaling are often presented as synonymous terms. Although some academic and scientific researchers sometimes point to subtle differences between the two methods, most marketers use the terms interchangeably to describe an analytic approach used to gauge survey respondents' preference score for different items.
  • MaxDiff analysis vs. standard rating scale questions
    In marketing research, standard rating scale questions differ from MaxDiff analysis in that they don’t force a respondent to choose their top preference from a list of choices. Rather, standard ratings aim to capture consumer opinions regarding a product or service. While types of rating scales vary, they often ask respondents to choose on a scale of 1 to 5, ranging from if they strongly disagree with a statement to strongly agree with a statement.
  • MaxDiff analysis vs. conjoint analysis
    In conjoint analysis, those conducting the research add more dimensions beyond what MaxDiff analysis seeks to determine by describing a product or service with multiple attributes. Multiple product features are combined to build many product concepts. Then respondents are asked to choose which concept they prefer, providing feedback that can be valuable in developing the most useful and marketable product.

Put MaxDiff to work

Armed with greater awareness of what MaxDiff analysis is, how it can benefit your market research, and its pros and cons, you can now get busy getting a better data-driven read on your customers preferences.

The more you know about what they like and value most, the better equipped you are to keep customers happy and attract new ones to grow your brand, and your business.MaxDiff analysis can play a key role in strengthening your brand. Work with SurveyMonkey’s expert research team to use MaxDiff to prioritize features and optimize your product.

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